Disabled veterans may qualify for VA back pay when their VA disability claim is approved. VA back pay is a retroactive payment of benefits made in one lump sum to cover the period between the effective date of disability and the decision date of a claim. A few different rules apply when calculating VA back pay.
VA disability back pay is retroactive pay given to a disabled veteran after the VA approves their service-connected disability. The disability claim process can take a long time. Veterans wait months, and sometimes years, to find out if their VA claim is approved or denied. Since it is a long process, veterans must endure without benefits during this waiting period.
If a disability claim is approved, the VA will pay retroactive benefits to the veteran in a lump sum from the decision date to the effective date. The effective date is usually the application submission date, but in some cases, the effective date is the date the disability began. Veterans will receive disability pay through direct deposit or check.
The dollar amount of disability back pay depends on a few factors such as disability percentage, annual VA disability rates, and whether the veteran has dependents.
How Do I Qualify for VA Disability Back Pay?
To qualify for VA disability back pay, you must have:
- A service-connected disability
- An approved VA disability compensation claim
- A period between the claim submission and decision date
During the disability claim process, the VA will review medical evidence and determine if your disability is service-connected, meaning it was caused or made worse by your military service. Veterans with approved claims receive a disability percentage rating and will receive monthly payments moving forward.
The VA will owe you those monthly compensation payments for the time that elapsed between filing the claim (the effective date) and the date they rendered their decision, and they pay it in one lump sum.
Veterans or survivors who receive VA pension benefits are also entitled to VA back pay for benefits they would have received between the effective date and the decision date of the claim.
What Does “Effective Date” Mean?
When the VA approves a claim, they assign an effective date for your entitlement to the benefit. There are a few different factors they consider when determining effective dates.
How does the VA select an effective date?
If a claim is filed within the first year after leaving active duty, the effective date can be as early as the day after leaving service. However, if you file after one year of separation, the day the claim is submitted becomes the effective date.
Veterans who have a medical condition that is considered a presumptive service-connected disability can get an effective date back to when the illness or injury occurred if they file within one year from leaving service. A presumptive condition is one that the VA already recognizes as being connected to service, making it easier to get claims approved. As with a standard disability, filing after the first year will put the effective date at the claim submission date.
Other situations can play a role in establishing an effective date. Requesting an increase in disability may change the effective date to the date that you can prove the disability got worse, or it will be the date of the increase claim. If the VA makes an error in deciding a disability claim, the effective date will become the date it would have been if it had been initially approved.
A change in the law can make previously denied or unsubmitted claims valid. A disability approved due to law change can become effective on the date the law changed or up to a year before claim submission.
What Is an Intent to File?
An intent to file notifies the VA that you plan to submit a claim for VA benefits. As a result, the VA will reserve the date of the intent to file as a potential start date for benefits. Why is the intent to file necessary? By locking in the potential start date, or effective date, an intent to file helps get you the earliest possible VA back pay if your claim is approved.
When starting your application online through the VA.gov portal, the system automatically generates and submits an intent to file. The VA receives notification, and no further action is required on your part. However, if you choose to file your claim through mail or in person, you’ll need to file a hardcopy VA Form 21-0966 for your intent to file.
After submitting the intent to file, you’ll have a year to gather all information and evidence you need to complete your disability claim and submit the completed application to the VA.
How Do I Submit an Informal Claim?
You may have heard of an informal claim and wonder how you go about submitting one. An informal claim is essentially an intent to file. Before March 24, 2015, veterans had to submit an informal claim to let the VA know they planned to apply for VA benefits.
In the past, to file an informal claim, veterans could simply submit any communication that notifies the VA of the claimant’s intent to file a claim. Any type of communication counted: email, letters, or other messages. An incomplete or unsigned application could also serve as an informal claim.
After March 24, 2015, the VA began using the terminology “intent to file” to refer to the action of alerting the VA that you’ll be filing a claim to lock in a potential effective date. The intent to file is now submitted automatically when beginning the online claim process or through the VA Form 21-0966.
How Does VA Disability Back Pay Work?
The first step in the VA disability back pay process is to file your application for disability compensation through either the online application portal, in person at your local Veterans Affairs office, or by mailing or faxing the VA Form 21-526EZ. The application must be filled out completely, signed, and with evidence included.
VA officials review disability claims to determine if your disability is service-connected and eligible for VA disability benefits. Due to many new claims and appeals the VA receives, there is a backlog of cases to review. Waiting for a decision on your claim can take months or even years, depending on the complexity of your case.
Once the VA approves your disability claim, they will give you the following:
- Disability rating
- Effective date
- Monthly compensation amount you will receive going forward
The VA establishes the effective date as the date you became eligible for disability compensation benefits. The VA uses a few factors to determine this date, but it is often either the date you filed your claim or the date your disability began.
Although VA disability payments will start coming after your claim is approved, the VA owes you a retroactive payment of benefits back to the effective date. You will receive the back pay in one lump sum through direct deposit or check. The amount of back pay equates to your monthly payment amount times the number of months between the effective and decision dates unless circumstances apply. For example, if back pay extends to a previous year, those months are paid at the monthly rate established for that specific year.
Back pay is calculated and automatically paid by the VA, and you do not need to initiate the process.
Do I Need a VA Disability Attorney to Get Back Pay?
While no action is required to start the back pay process, you should take an active role in monitoring its payout. The VA says most veterans receive back pay in 15 days, but often this is not the case. As time passes, you may wonder if you need to hire a VA disability lawyer.
It can be frustrating to wait for a VA decision and then wait again for your earned back pay. You may want to hire an attorney if you’ve been waiting for VA disability back pay for a while to help speed up the process. When selecting an attorney, choose one who specializes in veteran law and is experienced in getting benefits for veterans.
How Much Back Pay Will I Receive?
VA disability back pay is calculated by determining the time between the effective date and the date the VA approved your claim. The longer you’ve been waiting for benefits and the higher your disability rating, the more back pay you will receive.
A few factors play into back pay calculations. VA disability rates can change annually due to cost-of-living increases. If your back pay extends across multiple years, that year’s disability rate will apply to those months of back pay. If you’ve received severance pay, retired pay, or disability payments during the back pay period, those amounts are deducted from your back pay. A veteran cannot receive those payments along with disability compensation.
Do I Have To Pay Taxes on My VA Back Pay?
VA disability compensation is a non-taxable benefit paid to disabled veterans. Any back pay you receive for disability compensation is not taxable.
You may qualify for VA back pay if you have an approved VA claim for disability compensation for a service-connected illness or injury. The time between submitting your disability claim and the date the VA decides on the claim can be a long time. The VA pays you retroactive benefits to cover the period from their decision date to your disability effective date.
The effective date of a disability varies depending on circumstances. Veterans can have an effective date set to the day the disability began, the day they left service, or the day they submitted their completed disability compensation claim. It is important to file your VA claim as soon as possible to get the earliest allowed effective date.
To help lock in an early effective date, you should submit an intent to file. This lets the VA know that you will be completing an application for disability benefits. The date they receive your intent to file will become your potential effective date for benefits. You’ll have one year to submit the completed claim.
When the VA approves your claim, they will calculate how much back pay you are entitled to. Generally, the back pay amount is the total of monthly payments they would have paid you back to your effective date. A few factors, such as what year the back payments extend to, may change that monthly amount. There are also certain benefits you cannot receive at the same time, so further calculations may be needed to determine your exact back pay amount.
Unfortunately, you will probably have to wait for your back pay to reach you through direct deposit or check. If following up with the VA does not resolve your issue, you may want to consult an attorney that specializes in veterans benefits to help you navigate the process.